Brokers call for more bridge-to-development and semi-commercial products

Brokers are also urging the industry to be more flexible with borrowers looking to use the same lender from acquisition all the way through to completion.

Avamore Capital's report covers the development finance and the unregulated bridging sphere and puts together trends and thoughts for H1 2018 along with key predictions for H2 2018.

According to the surveyed brokers, volumes and pricing are set to remain relatively consistent for both bridging and development. The average interest rate for development finance now stands at around 0.7% pm / 8.5% pa.

Although the average development finance loan term is 18 months, brokers believe that this is likely to move to 24 months due to the increased sales cycle.

The lender also gave its own insights into H2 2018 trends. Amongst its predictions, Avamore expects to see a 'small small downward turn in pricing' due to continual institutional investor interest in the sector and a lack of investment class alternatives.

On “vanilla bridging”, it believes pricing is unlikely to fall further, but on the value add and refurbishment side of the market, Avamore says there is "still room for pricing to fall" due to the capital influx from institutions chasing the sector.